Water services, that is, water supply and wastewater disposal, are traditionally the responsibility of local governments. Many municipalities have joined forces to meet the challenges of increasing water quality requirements, aging infrastructures, and decreasing fiscal resources. Regional cooperation is claimed to generate benefits in various ways, but there are challenges to this assumption. This article assesses the benefits and challenges of regional cooperation through the following categories: economies of scale, socioeconomic and spatial disparities, autonomy and legitimacy, by comparing Finnish experiences with previous research findings. Our assessment concludes that the benefits and challenges of regional cooperation are not straightforward, not only dependent on the local context but also on the level and tradition of cooperation, especially on the degree of organizational autonomy.